Keeping an eye on Apple

Feb 07, 2013

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In its 2013 Supplier Responsibility report Apple generally stresses the adequacy of its policies and the supposed advances it has made on worker rights. Apple writes about monitoring the progress of corrective actions at Foxconn, the company’s main supplier, together with the Fair Labor Association and at the last checkpoint, it was found that ‘Foxconn has implemented many changes ahead of schedule and the rest are on schedule for completion by July 1, 2013’. The Good Electronics Network, however, is keeping an eye on Apple, measuring Apple’s promises against actual working conditions on the ground. Contrary to the rosy picture painted by Apple there are also numerous credible reports and articles by organisations such as SOMO, SACOM, the Maquila Solidarity Network and others that speak of student interns being coerced to work at Apple supplier factories, workers being required to work massive overtime, harsh treatment of workers by management personnel, and the lack of democratic worker representation. The GoodElectronics Network is here voicing its concerns over these issues. GoodElectronics is calling upon Apple to further increase its efforts to effectively address the outstanding labour rights issues in its supply chain in order that the actual treatment of factory workers is improved significantly. This will inevitably involve revising the Apple business model, purchasing practices and audit methodology.

Keeping an eye
on Apple

GoodElectronics Public Statement

Amsterdam, 7
February 2013

In an interview with Bloomberg BusinessWeek in December 2012, Apple CEO
Tim Cook stated that ‘Apple wants to be
as innovative with supply chain responsibility as we are with our products.
That is a high bar’.[1]

In documents pertaining to the Apple shareholders meeting that will take
place on February 27th in Cupertino, USA, Apple claims that ‘no other company [is] doing so much to safeguard and
empower workers as Apple does today’.[2]

In its 2013 Supplier Responsibility report
Apple generally stresses the adequacy of its policies and the supposed advances
it has made on worker rights. Apple writes about monitoring the progress of
corrective actions at Foxconn, the company’s main supplier, together with the
Fair Labor Association and at the last checkpoint, it was found that ‘Foxconn
has implemented many changes ahead of schedule and the rest are on schedule for
completion by July 1, 2013’.[3]

The Good Electronics Network, however, is
keeping an eye on Apple, measuring Apple’s promises against actual working
conditions on the ground. The GoodElectronics Network brings together civil
society organisations that stand for human rights and sustainability in the
global electronics industry.

Contrary to the rosy picture painted by
Apple there are also numerous credible reports and articles by organisations
such as SOMO, SACOM, the Maquila Solidarity Network and others that speak of
student interns being coerced to work at Apple supplier factories, workers
being required to work massive overtime, harsh treatment of workers by
management personnel, and the lack of democratic worker representation. The
GoodElectronics Network is here voicing its concerns over these issues.

Freedom of association

Apple claims that 98 per cent of
facilities audited in 2012 are in compliance with the freedom of associationprovision of Apple’s code, and that 95
per cent of the audited facilities are in compliance with the required
management systems for freedom of association. In the report, there is no
explanation how Apple arrives at these figures. In countries like Mexico, China,
the Philippines, Malaysia, Thailand and Vietnam, however, where Apple products
are made there are massive structural and sometimes legal barriers to freedom
of association. According to Apple’s newly published top-200 supplier list, the
company is sourcing from over 14 countries, at more than 330 production facilities
in China, between 20-25 in the Philippines, some 27 in Malaysia, 14 in
Thailand, 7 in Vietnam, and 5 in Mexico.

SACOM points out that there have been
major strikes and riots at a number of Apple suppliers in China in the past months, including plants in Beijing, Huai’an City
in Jiangsu province, Fengcheng City in Jiangxi province, Taiyuan City in Shanxi
province, and Zhengzhou City in Henan province, involving tens of thousands of
workers. These worker protests stem from unresolved disputes over wages,
working hours, holidays, occupational health and safety issues, etc. These
incidents clearly reflect the failure of a proper worker representative system
at these production facilities.[4]

The Maquila Solidarity Network (MSN) and the
Mexican labour rights group CEREAL have frequently spoken about the role of
corrupt ghost unions in Mexico in
preventing workers from exercising their associational rights, including in the
electronics sector.[5]

The Workers Assistance Center (WAC), based
in the Cavite Free Trade Zone in the Philippines,
has more than once reported about the ‘no union no strike’ rule that applies in
special economic zones in the Philippines where a number of electronics
supplier factories are located.[6]

The Malaysian
electronics industry ischaracterisedby a highly restrictive labour
legislation, which, amongst other things, limits collective bargaining rights
and the right to strike. Anti-union legislation has invariably led to low
unionisation levels in Malaysia, and unionisation in the electronics sector in
particular remains low due to the legacy of a ban on unions when this sector
began to be promoted as a pioneer industry.[7]

In Vietnam,
the major issue faced by workers in the digital camera industry is the lack of
freedom of association and collective bargaining rights.[8]

Thai workers face a myriad of obstacles in
fulfilling their rights to association and collective bargaining, such as
hostile employers, weak legal protection and uncooperative government officials.
Many employers want no interference in managing the production, in compliance
with laws, or in decisions on benefits and wages.[9]

Regarding auditing compliance with freedom
of association, SOMO in its May 2012 paper argues that ‘It is clear from the
auditing practices and the results noted in corporate responsibility reports
that companies have failed to adequately assess issues around the
implementation of freedom of association and collective bargaining in their
supply chain so far. Overall violations of freedom of association and
collective bargaining are not being picked up in most audits and are therefore
not being addressed. There are different
reasons for this. The most important reason is the lack of attention paid to
freedom of association. There is unwillingness on the part of a large group of
companies to take freedom of association seriously, as we have seen from the
code review, from audit practices and the absence of trade unions in the
electronics industry.[10] Apple’s bloated compliance figures seem to indicate that Apple lacks an
understanding of freedom of association and the importance of democratic worker
representation in ensuring respect for workers’ rights.

Apple has recently announced plans to
allow workers to elect union representatives. In the Foxconn Verification
Status Report of August 2012 FLA writes that the most significant commitments
made by Foxconn following FLA’s original investigation were related to union
elections and worker representation.[11] Early February 2013,
Foxconn announced that it would ‘enhance employee representation in the Foxconn
Labor Union’ through elections.[12] It is, however, uncertain how this will be implemented. SACOM points
out for instance that it is not yet decided what percentage of the Foxconn union
leaders will be workers that are democratically elected by co-workers. SACOM emphasises
the importance of a larger representation of frontline production workers and
grassroots employees. Also, unions at Foxconn must be free from the
management's control.

Hours of work

With regard to hours of work, the Apple
supplier report mentions that the company’s suppliers have reached an average
of 92 per cent compliance with Apple’s new hours-of-work standard of 60 hours
per week (48+12), ‘across all work weeks’.

This seems to mean that some weeks are
well over 60 hours, while other weeks are lower. On the basis of statistics
provided by Apple, it was calculated that in the months September-November
2012, 120,000 workers worked more hours than Apple’s maximum standard.[13]

This is confirmed by independent SACOM
research at Apple supplier Pegatron in Shanghai, where workers have 11-hour shifts
that are topped up by up to 6 hours overtime per day. In the period
Sept-Oct 2012, workers were only allowed 1-2 days off. The monthly overtime hours worked were
150-200, which is 4-5 times the legal limit.

Significantly, the period in which
overtime exceeded Apple’s hours of work standard were those prior to the
release of new Apple products like the iPad 3, iPhone 5 and iPad mini,
indicating that Apple was largely responsible for the excessive overtime.

Apple’s hours-of-week standard is
60h/week, while the legal work week in China is 49 hours (40-hrs workweek plus
a maximum of 9 hrs overtime). Apple has indicated it will require its Chinese suppliers
to respect this legal limit by July 2013, but it is not clear from its latest
report how Apple will accomplish this.

Abuse of student internships

In January 2013, Apple reiterated its standards for suppliers’ hiring of
students. Apple writes that ‘student working hours
must comply with legal restrictions and not conflict with school attendance.
Suppliers must also ensure that the education program requirements adhere to
laws and regulations. Apple states ‘to partner with industry consultants to help
[its] suppliers improve their policies, procedures, and management of
internship programs to go beyond what the law requires.’[14]

This may sound fine, but recent investigations by SACOM at an Apple
supplier in Shanghai point out an altogether different reality. Student workers
still have to put up with long hours of work including overtime on a daily
basis to meet high production targets, just like regular workers. Student
workers, however, can only earn CNY 85 a day, including overtime premium, while
regular workers earn considerably more, especially during peak and super peak
seasons. Student workers are paid by
their schools, with tuition fees deducted. Student workers describe the working
environment as dusty and noisy. Reportedly, students would rather go back to
school but are told they will not receive their graduation certificates if they
leave.

With this statement, GoodElectronics is
following up on the campaign ‘Time to
bite into a fair Apple. Call for sustainable electronics' that asked Apple
to improve communication between workers and management at Apple
suppliers, to engage with labour rights
organisations, and to provide consumers
with credible information about working conditions for workers down the supply
chain.Most of all, GoodElectronics
stressed that Apple should implement reasonable purchasing practices including
fair prices and well-planned lead times so that workers earn a living wage
without having to work excessive overtime.

On the basis of the above, GoodElectronics
is calling upon Apple to further increase its efforts to effectively address
the outstanding labour rights issues in its supply chain in order that the
actual treatment of factory workers is improved significantly. This will
inevitably involve revising the Apple business model, purchasing practices and
audit methodology.